Subgrant Agreements Guidance
As in years past, the online 2017 Basic Field Subgrant Application process will be accessed from LSC Grants. We will continue to require that each applicant submit its request(s) for subgrant approval electronically.
Guidance on the Subgrant Application Process
Step 1: Submission of Subgrant-Related Information
Recipients are required to submit information on their basic field subgrants for 2017 by June 1, 2016. Specifically, they are required to provide the information requested in the LSC Grants data fields - located in the Subrecipient Profile, Subgrant Summary, and Subrecipient Budget screens. Recipients are also required to upload the following:
- A Draft Subgrant Agreement (see note below about LSC's Subgrant Agreement—Form A);
- Subgrant Inquiry Form B (for new subgrants) or Subgrant Inquiry Form C (for renewal subgrants);
- The Subrecipient’s Accounting Manual (or letter indicating that the Subrecipient does not have one and why);
- The Subrecipient’s Most Recent Audited Financial Statement (or letter indicating that the Subrecipient does not have one and why);
- The Subrecipient’s Most Recent Form 990 filed with the IRS (or letter indicating that the Subrecipient does not have one and why);
- Evidence of Subrecipient’s Current Fidelity Bond Coverage (or letter indicating that the Subrecipient does not have one);
- Evidence of Subrecipient’s Conflict of Interest Policy (or letter indicating that the Subrecipient does not have one); and
- Evidence of Subrecipient’s Whistleblower Policy (or letter indicating that the Subrecipient does not have one).
Recipients begin this process by selecting the “Initiate Step 1” button under the “Subgrant” heading on their LSC Grants home page. Recipients are encouraged to use LSC’s Subgrant Agreement Form (Form A) as a model subgrant agreement, which is attached hereto. If the Subgrant Agreement Form provided by LSC is not used, the proposed agreement should include, at a minimum, the substance of the provisions of that form.
Recipients are asked to pay careful attention to the terms included in, and instructions on, the Subgrant Agreement Form. Some of the terms have been modified from previous years, and the current LSC subgrant agreements must reflect those modifications.
Submission of the above-listed information neither obligates the applicant to execute the proposed subgrant, nor does it obligate LSC to approve the draft subgrant agreement provided.
Step 2: Submission of Request for Subgrant Approval
At least 45 days in advance of the subgrant’s effective date (typically before November 17, 2016 for a January 1, 2017 start date), recipients are required to request LSC’s subgrant approval. Recipients begin this process by selecting the “Initiate Step 2” button in LSC Grants. This button is located on the LSC Grants home page, under the “Subgrant” heading and to the right of the listed “Status” of the recipient’s Step 1 submission. Applicants will be required to review the information previously submitted in the LSC Grants data fields and to make any updates or required changes. Grantees will not be required to update the Case Service Reporting information provided in Step 1, but have the option to do so. All applicants are required to upload an Executed Subgrant Agreement. Lastly, applicants are also asked to summarize any changes made to the information in the LSC Grants data fields, and to summarize any differences between the Draft Subgrant Agreement and the Executed Subgrant Agreement.
As also explained above, the subgrant approval process established in 45 CFR § 1627.3(a)(2) allows 45 days for LSC’s review of subgrant agreements.
For questions regarding the Subgrant Application process, please email us. For technical and website issues, email tech support.
General Guidance for All Subgrant Applicants
Applicability to All LSC Grants
All LSC grant recipients should review the provisions of 45 CFR Part 1627, especially the definitions at Section 1627.2, to ensure that advance approval is requested and received from LSC before the commencement date of the subgrant agreement. Recipients are also reminded that using LSC funds for a subgrant agreement without receiving LSC’s prior approval may result in the initiation of a questioned cost proceeding under 45 CFR Part 1630 to recover the funds expended.
Under 45 CFR Part 1610, a subgrant of LSC funds is considered a Part 1610 transfer of LSC funds in almost every situation. This regulation implements statutory restrictions on the use of non-LSC funds by LSC recipients. With the exception of PAI transfers, the prohibitions and requirements in Part 1610 apply to both the LSC and non-LSC funds of the person or entity receiving the transfer (with modifications to the priorities and timekeeping requirements). See 45 CFR § 1610.7.
Private Attorney Involvement Subgrants
In 2014, we revised 45 CFR Part 1614, the regulation governing, among other things, our Private Attorney Involvement rule, activities, and allocations. The revised rule came into effect on November 14, 2014, and is available at the Federal Register website.
Further, the provisions of 45 CFR Part 1610.7, regarding restrictions on non-LSC funds of entities receiving transfers of LSC funds, contain the following exception regarding transfers that are solely for Private Attorney Involvement activities:
For transfer of LSC funds to bar associations, pro bono programs, private attorneys or law firms, or other entities for the sole purpose of funding private attorney involvement activities pursuant to 45 CFR Part 1614, the prohibitions or requirements of this part shall apply only to the funds transferred.
Case Service Reporting
The accuracy of case service reporting is critical, and recipients must ensure that each subrecipient that is performing case work has a copy of the CSR Handbook (2008 Ed., as amended 2011). Recipients must ensure that subrecipients fully comply with case service reporting guidelines.
Organizations contemplating mergers or consolidations should consider whether a subgrant will be necessary as an interim measure until the merger or consolidation has been completed. All of the requirements of 45 CFR Part 1627 apply to such subgrants as well. Thus, a request for our approval should be submitted 45 days prior to the proposed beginning date of such a subgrant.
Pursuant to 45 CFR Part 1627.3(b)(3), a substantial change in the work program of a subgrant or an increase or decrease in funding of more than 10 percent requires our approval in accordance with 45 CFR Part 1627.3(a). Minor changes in the work program or changes in funding of less than 10 percent do not require approval, but we must be informed of such changes inw riting.
Each recipient's LSC Grants homepage includes a Request Modification button for each LSC-approved subgrant. Recipients must utilize the LSC Grants system to request our approval for, or to notify us of, proposed changes to a subgrant. Any such requests or notifications submitted by hard copy or email will be returned.
Applicants are reminded that, pursuant to 45 CFR Part 1627.3(c), recipients are responsible for ensuring that subrecipients comply with the financial and audit provisions of LSC. Additionally, pursuant to 45 CFR Part 1627.3(d), recipients are responsible for repaying LSC for any disallowed expenditures by a subrecipient, irrespective of whether the recipient is able to recover such expenditures from the subrecipient.